The Effect of Ownership Structure on Financial Performance According to Tobin's Q model A study of a Sample of Companies Registered in the Iraq Stock Market

Abstract

The research aimed to measure and analyze the impact of ownership structure on financial performance according to Tobin’s Q model, given the impact that a change in ownership structure can have on the financial performance of companies. Therefore, the research problem was represented in what is the size, direction, and mechanism of impact of the change in ownership structure on the financial performance of a sample of companies. Listed on the Iraq Stock Exchange for the period from 2012 to 2022? For a sample of companies listed on the Iraq Stock Exchange for the period 2012-2022, using the Generalized Moment Methodology (GMM) System Generalized Method of Moment based on balanced double data (Panel Data) to test and analyze the study hypotheses, using the statistical program (E-Views 10), The results of the study concluded that the factors affecting the company’s performance varied in that they included several variables, including concentration of ownership, as well as financial leverage and the size of the company, in determining the levels of the company’s performance in the Iraqi business environment during the period studied. Also, changes in the factors of concentration of ownership and financial leverage had adverse effects on The level of financial performance in the sample companies due to the disturbances and instability that accompany these changes resulting from the concentration of ownership in the hands of a limited party of shareholders, which reflects negatively on the financial performance of the company. In the same way, relying on high levels of leverage will have negative effects on the financial performance of the company as a result. This results in an increase in the volume of their obligations, which requires the need for commercial companies operating in the Iraqi business environment to maintain acceptable levels of ownership concentration and financial leverage in order to improve their financial performance, whether it is related to achieving a return on their assets or for their shareholders.

Keywords

• Ownership structure, financial performance, Tobin's model.